Buying Without Real Estate Agents

[Phantom]

Hi all.
I have been reading the forum for quite a while now and find it very worthwhile and some great info is to be found here.
There really is some valuable stuff here that is great to see.
I am new to the property investment scene.
My question is that if you see a property for sale that is listed with a real estate agent, Is it legal/ethical to go and see the vendor without a real estate agent and ask if you can look through the property.
Following on from that if you like the property can you then negotiate a contract with the seller? and proceed in the normal way from there with the purchase.

Thanks very much

Graham

[Robbie]

No and no!!
I don't know the actual law (I'm sure you are soon to get a reply from someone else who does) but the answer is no!
You can go and visit the vendor but the real estate agent will be very edgy that you are trying to avoid their commission ( which I presume you are) and they may insist on attending also.
As I said I don't know the actual law but I know that when a vendor signs up with an agent there is a piece of paper that they are supposed to sign and give to the real estate agent with a list of names that should be excluded from the listing i.e if one of the people on the list buy the property they are excluded from the real estate agents commission. I fyou aren't then it is presumed that you learnt about this property through the agent and legally (and ethically) the commission needs to be paid - but I'm sure there is someone who can explain all this better than me!!

Good Luck!

[simoncoles]

My understanding is that you can certainly legally approach the vendor and also arrange the contract without the agent however the vendor will still be liable to pay the agents commission. (Given the contract with the vendor and the agent is still valid)

From the agents point of view it is probably preferable as they get the commission without the further work of showing the property etc.

Si

[pixie]

No no no.
Sorry but this is simply unethical and you shouldn't go there.

The real estate agent put a sign out / advertised it and you responded. There is absolutely no possibility that you are a buyer for the property without the agent being entitled to a payment of commission and legally the owner will have signed an agency saying / agreeing to this.

Now - from the owners point of view - who are you? You might not be who you say you are and simply be casing the joint etc. This has happened before and is an easy ploy. It is not in the interests of the seller to deal directly with you at all.

Having engaged the agent to sell their home there is value for all parties in using them.

[RentMaster]

If you want to buy a house privately, then look at the classifies ads from people selling privately. Then there is no problem. There have been a number of cases before when people have tried to do a deal behind the agents back, and it always gets messy. Best to be avoided.

[janesco]

Hi all

It appears to me that this is equivalent to shop lifting real estate style.

I know (well I don't know I only believe) that there are some unethical sales people out there. What with their false vendor bids and quote traps etc (yes I have been reading Jenman). This shouldn't and doesn't justify unethical stuff from purchasers or vendors.

So don't go there

[Phantom]

Thank you all for your replys.
I may have been a bit vague in my post. I would have no problem in paying the real estate agents fee. It is not my intention to try and stiff them from there commission. I understand that this is there job and how they get paid. I meant it from the view that sometimes i feel that a personal approach to people often results in a better deal to both parties.
Thanks

Graham

[property_guru]

A general listing is a contract between the real estate agent and the vendor giving the agent the right to advertise and sell the property, but also leaving the vendor the option of selling privately if they wish. Other agents can approach the vendor and also sign up a general listing. This is the case where there are multiple signs on the one property.

An exclusive or sole agency listing is a contract between the agent and the vendor giving the agent exclusive rights to sell the property. If a buyer approached the vendor privately the vendor is legally obligated to direct them to the agent. Other agents are legally not allowed to set foot on the property or contact the vendor if an exclusive listing exists.

[xris]

A general listing is a contract between the real estate agent and the vendor giving the agent the right to advertise and sell the property, but also leaving the vendor the option of selling privately if they wish. Other agents can approach the vendor and also sign up a general listing. This is the case where there are multiple signs on the one property.

An exclusive or sole agency listing is a contract between the agent and the vendor giving the agent exclusive rights to sell the property. If a buyer approached the vendor privately the vendor is legally obligated to direct them to the agent. Other agents are legally not allowed to set foot on the property or contact the vendor if an exclusive listing exists.

Hello guru,

Sort of but not quite.

xris

[property_guru]

Xris, please elaborate

[xris]

Other agents are legally not allowed to set foot on the property or contact the vendor if an exclusive listing exists.

There are quite a few things here, but this is one just to start with.

Who told you that? Think about it for a moment and then hopefully realise how silly a law like this would be, if ever such a 'law' existed. It is very common for salespeople to approach vendors who have an agency contract with another REA.

xris

[property_guru]

There is a blurb on the REINZ website under buyers and sellers.

I can't find any legislation relating to this but at the very least it's unethical. Obviously I know agents do it all the time, but that doesn't mean there is no law relating to it.

I will make further enquiries so we will all know where the Real Estate Institue stands on this.

My aim is to inform readers with factual information and not just express my opinion. After all, it is my understanding that the whole point of this thread is to inform people of the legality of purchasing or selling a property that is listed with an agent.

So why don't we all work together and we'll all be more knowledgable for it.

[xris]

Hello guru,

I commend your enthusiasm but it is misplaced I am afraid.

Back to common sense. Since when has there ever been a law preventing salesperson A talking to vendor B who just happens to have a sole agency contract with agent C?

What if salesperson A was married to vendor B? Would it be kinky sex with each being gagged in case the police were spying on them to see if they were breaking the law by indulging in verbal communication?

I understand where you are coming from, it's just that you, or the person telling you, has got things a little muddled. For that reason it may be better to check your information before informing readers here of the so called facts. I am sure you would not want to mislead people.

And back to an earlier post of yours about finders and the law. With respect to you and to pooomba, he would not be the first person I would ask for a neutral opinion on this matter. Surely you can see why?

xris

[wildthing]

would have no problem in paying the real estate agents fee. It is not my intention to try and stiff them from there commission

Great that you have confirmed this. IMHO, you risk alienating both the vendor and REA unless you are careful in your approach. Though with a motivated vendor and starving salesperson, both may be delighted with a quickly signed contract for little work

[property_guru]

Hi Xris,

REINZ Rules of practice:
14.10 A member shall direct any enquiry about the purchase of land or a business to the current sole agent for the land or a business, if the member does not have a current agency appointment.

As far as approaching the vendor to introduce yourself, no problem. We're told in our office not to interfere with other agency's exclusive listings simply because we wouldn't like them to do it to us.

In the case of Agent A been married to Vendor B: Obvious marital issues must exist if Vendor B hasn't already given the listing to their spouse.

The legality of property finders will be debated until someone is prosecuted for it.